WEEKLY MARKET REPORT

Week Ending 13^th January, 2012

Northern Micron Indices Comparison: Source of information: AWEX

HAPPY NEW YEAR!

The Christmas cheer from the last sale of 2011 extended into the new year as sales resumed after the three week lay-off. Melbourne opened proceedings on Tuesday with XBs accounting for 33% of the catalogue as against the FLC selection making up 35% of the offering. These startling figures illustrate just how much XB wool is still coming through the system. Joinings to terminal sires seems to be as popular as ever or, in some areas, growing whereas convincing growers to join to a merino ram is like telling someone the horse and cart is the way of the future! This high volume of XB wool and the shrinking amount of merino wool must be a concern for not only the breeding industry but also for mills trying to keep up with the ever increasing domestic demand from China and India. All three centres were on line on Wednesday with increases of up to 60 cents for some finer indicators. Thursday saw a minor correction in Sydney of up to 10 cents with Melbourne’s medium types losing 10 to 15 cents. The worrying market was in the west as Fremantle (which can signal market direction for the next selling day) fell 20 to 40 cents. Despite Thursday’s hiccup the increases were still good as the table above shows. The EMI gained 27 cents (2.3%) and in US terms a jump of 75 cents (6.4%). Currency rates remained steady for most of the week at around 103 US cents for 1$ AUD, this representing a 4 cent rise from when sales finished in 2011. A good result despite the currency shift and ongoing economic worries in Europe.

Skirtings mirrored the fleece room as all vm levels and styles made good gains right through to the final lot on Thursday. The best style fine and superfine pieces and bellies added 50 to 70 cents to their pre Christmas values with the broader and less stylish lots gaining 20 to 30 cents. As explained earlier the large amount of XB wool combined with cardings  amounted to 20,000 bales (41%) of the national catalogue - the largest offering in both sections for 12 months. Locks added 40 to 50 cents while crutchings and stains were up to 15 cents better sending the MCI up 22 cents to 695 cents. Crossbreds remained unchanged in Sydney, except for 26s moving 10 cents higher and 5 up in Melbourne where the broader types suffered under the big volume, retreating 5 to 15 cents. Next week’s third largest national catalogue of the season at 57,000 bales may test the market as Thursday’s Fremantle falls could be a precursor to next week. This week’s rise was driven more by a supply shortage than an increase in demand according to a few traders. Interesting times ahead!

                                                                Agrisk FDIC Indicative Quotes 13/01/2012

MAJOR AUCTION BUYERS (Bales)

Eastern Market Indicators (AUD cents/kg clean)                                                                AUD/USD Currency Exchange

                Eastern 1216 cents (é27) compared with 16/12/11                                                1.0302 ê 0.0403 compared with 16/12/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1250 cents (é33) compared with 16/12/11